Data Facts Lending Solutions Blog

Ability To Repay Rule Quick Guide-8 Underwriting Factors

Posted by Jennifer Hamby

Jun 9, 2014 7:30:00 AM


The ability to repay rule (ATR) is part of Regulation Z – Truth in Lending Act (TILA). The Consumer Financial Protection Bureau (CFPB) issued a final rule about ATR in January 2013, and the rule became effective in January 2014. The basis of the ATR is the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), and it generally requires creditors to make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling and establishes certain protections from liability under this requirement for “qualified mortgages”.  The rule requires creditors to keep a record of their compliance for a period of three years after a loan is closed.

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Topics: Mortgage, Mortgage compliance, CFPB, ATR, Ability To Repay, UDM

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